Futures lower, ISM manufacturing PMI, gold’s record high - what’s moving markets
Investing.com - U.S. futures point lower ahead of the start of a holiday-truncated trading week, with much of the focus set to revolve around upcoming economic data that could provide more clarity around the trajectory of U.S. interest rates. Swiss food titan Nestle’s shares dip after the abrupt departure of its CEO. Elsewhere, gold touches an all-time peak amid expectations for lower U.S. rates and trade-related uncertainty.
1. Futures slip
U.S. stock futures dropped on Tuesday, as traders returned for a week shortened by a holiday but not devoid of potentially consequential events.
By 03:37 ET (07:37 GMT), the Dow futures contract had fallen by 113 points, or 0.3%, S&P 500 futures had shed 15 points, or 0.2%, and Nasdaq 100 futures had declined by 65 points, or 0.3%.
The main averages on Wall Street were closed on Monday in observance of the Labor Day holiday. At the end of the last trading day on Friday, stocks dipped, weighed down partially by declines in artificial intelligence-related names.
But, despite August being a traditionally difficult for stocks, the S&P 500 gained 1.9% for the month, bringing its year-to-date advance to roughly 10% and putting the benchmark index not far from record highs. It was the latest leg higher in what has become an extended recovery in equities since an April swoon sparked by concerns over sweeping U.S. tariffs.
2. ISM manufacturing PMI ahead
Investors are now turning their gazes back to the economic calendar, which will be headlined this week by Friday’s release of the ever-important monthly nonfarm payrolls report.
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Analysts have said that a soft or tepid reading for August -- which would come after an unexpectedly weak return in July and deep downward revisions to the preceding two months -- could further cement bets that the Federal Reserve will ratchet down interest rates at its next policy meeting on Sept. 16-17.
Economists expect the U.S. to have added 74,000 roles, versus in 73,000 in July.
In the meantime, markets will be keeping tabs on other indicators, including a gauge of U.S. manufacturing sector activity on Tuesday from the Institute for Supply Management. The August measure is tipped to come in at 49.0, compared to 48.0 in July yet still below the 50-point mark denoting contraction.
3. Nestle CEO ousted
Switzerland-listed shares in Nestle (SIX:NESN) dropped by more than 3% in morning dealmaking on Tuesday after the food giant announced the sudden departure of its chief executive for the second time in a year.
CEO Laurent Freixe was ousted from the post on Monday in the wake of a board meeting to discuss the findings of an investigation into an undisclosed romantic relationship with a subordinate that violated the firm’s code of conduct.
Freixe is being replaced with immediate effect by Philipp Navratil, a veteran company insider who has headed up its Nespresso coffee division, Nestle said.
The shake-up may present fresh headwinds to a business already grappling with several years of muted sales volumes and share price declines, as well as the dismissal of former CEO Mark Schneider a year ago. Long-time Chair Paul Bulcke has also said he will step down in 2026.
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4. Gold hits record high
Gold prices touched a new record high on Tuesday, as bullion’s longstanding safe-haven appeal was burnished by wagers of U.S. interest rate cuts and murkiness around U.S. President Donald Trump’s trade tariffs.
Broader metal prices also notched strong gains, with silver surging to a near 14-year high, while platinum remained in sight of a 11-year high. This came as the dollar sank to a five-week low on expectations of falling U.S. borrowing costs.
Non-yielding assets such as metals tend to benefit from lower rates, given that they make commodities appear more attractive over investing in government debt.
Spot gold surged 0.8% to a record high of $3,508.54 an ounce, while Gold Futures for December hit a peak of $3,578.20/oz. Spot prices curbed some gains to trade 0.2% higher at $3,482.28/oz by 03:27 ET.
Gold’s latest round of gains was spurred by heightened uncertainty over Trump’s trade tariffs, after an appeals court ruled last week that they were illegal. While the court said Trump’s tariffs could remain in place until mid-October, the president criticized the decision and said he would challenge the ruling in the Supreme Court.
5. Oil pushes higher
Oil prices rose, extending the previous session’s gains, as traders weighed the risk of fresh supply disruptions from the Russia-Ukraine conflict against expanding output from OPEC+ members.
As of 03:32 ET (07:32 GMT), Brent oil futures expiring in November gained 0.9% to $68.74 per barrel, after jumping more than 1% on Monday.
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West Texas Intermediate (WTI) crude futures did not settle on Monday due to the U.S. holiday, and traded 1.0% higher from their Friday close at $65.24 per barrel.
Hopes for a Russia-Ukraine peace deal have dimmed after Trump last month urged Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin to hold direct talks before considering a trilateral summit hosted by Washington.
The intensified airstrikes have raised the chances of more sanctions against Russia, potentially leading to supply disruptions, which could push prices higher. The U.S. and its allies are also stepping up enforcement of secondary sanctions on Russian oil, though the measures have so far had limited impact on flows to Asia.
Partly offsetting these risks was increased production from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) in recent months, which has raised worries over a possible supply glut. Traders are now looking ahead to the Sept. 7 meeting of OPEC+ for signals on its output policy.
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